Presentation by Mydin Mohamed Holdings Berhad

"One Vision, One Identity, One Community
ASEAN Economic Community
(AEC)
Impact on distributive trade
AEC – ASEAN Economic Community
Objectives – 4 main PILLARS
PILLAR 1
PILLAR 2
PILLAR 3
PILLAR 4
Single market and
production base
Competitive economic
region
Equitable economic
development
Integration into global
economy
Advantages
1. PILLAR 1, to create a single market and production base across
ASEAN, with minimal barriers to trade; and
2. PILLAR 2, to create a region which has the framework to foster
competition in a manner that benefits investors , businesses and
consumers
Advantages
• Reduction/elimination of tariffs and non-Tariff barriers
• Trade facilitation – free flow of goods
• Liberalisation of service sector, ie free provision of services across
borders
• Movement of skilled labour will be linked to provision of services
as well
• Freer flow of investment and capital, ie Financial integration of
capital markets and investment (note – “freer”, and not “free”)
Disadvantages
Disadvantages
• majority foreign ownership of key services
• Over-focus on more lucrative export/overseas market to the
detriment of local market, thereby indirectly creating;
i. Over-reliance on imports and;
ii. Exodus/outflow of hard foreign currency out of the country
• movement of skilled labour,
i. will also lead to mass movement of unskilled labour leading
to an overwhelming immigrant population versus local
population
ii. Loss of employment opportunities for the local population
• The domination of foreign retailers over the local retail market
• Closure of smaller local retailers
• So-called FDI using local funds
• Unrestricted opening of new outlets by foreign players
Conclusion
While removal of trade barriers is to be lauded, some form of
“shielding” must continue;
• to exist NOT to protect local industries BUT to ensure equal
footing between local and foreign enterprises in the long run ie
“healthy and fair competition”
• to ensure stable social demographics and growth of local
population thereby avoiding the massive social problems and
social unrest that will occurred if movement of skilled, semiskilled and unskilled labour is left “unchecked”
• to control/mitigate spiraling inflation which will ultimately result
from the improved standards of living ie higher costs of living
• to ensure that local population have “some say” over their
national economy
End of Presentation
Thank You